The Nigerian Stock Exchange has given clarifications on the public notice released by the Federal Inland Revenue Service (FIRS) in July, itemizing contract notes at an ad valorem rate of 0.08% up from 0.075%, effective 7th December 2020.

The circular released by the Nigerian Stock Exchange reads:

“In reference to the Public Notice in the Business Day Newspaper of Monday, 20 July 2020, captioned ‘Clarification of Administration of Stamp Duties in Nigeria’ issued by the Federal Inland Revenue Service (FIRS) (A copy is attached as Appendix A for ease of reference).

“The Public Notice provided, amongst other things, information on dutiable instruments and the applicable flat or ad valorem rates, with Contract Notes 1 itemized at an ad valorem rate of 0.08%. As you know, this is at variance with the current rate of 0.075% administered in the Nigerian Capital Market.”

To that extent, Dealing Members of the Nigerian Stock Exchange are to note the following:

• Effective December 7, 2020, the Central Securities Clearing System Plc. (CSCS) will adjust its system to implement the automated deduction of the Stamp Duty rate of 0.08%.
• Dealing Members are required to immediately engage their software vendors for the required adjustments to their technology applications, to reflect the 0.08% rate ahead of the effective date of 7 December 2020.
• Dealing Members are required to communicate the changes above to their clients immediately, ahead of the effective date.

What you should know

Nairametrics revealed that the FIRS listed at least 50 types of transactions that are eligible for stamp duty deductions.

Some of the listed chargeable transactions include bank deposit or transfer, loan agreement, Memorandum of Understanding (MoU), sales agreement, will, tenancy/lease agreement, and all receipts.

The FIRS noted that the recently inaugurated FIRS Adhesive Stamp is not the same as the postage stamp administered by NIPOST for the purposes of delivery of items and documents.

The Stamp Duties Act, 19391 defines Contact Notes as “the note sent by a broker or agent to his principal, or by any person who, by way of business, deals, or holds himself out as dealing, as a principal in any stock or marketable securities, advising the principal, or the vendor or purchaser, as the case may be, of the sale or purchase of any stock or marketable security, but does not include a note sent by a broker or agent to his principal where the principal is himself acting as broker or agent for a principal.”

See the circular below:

Download (PDF, 566KB)

The Governor of the Central Bank of Nigeria, Godwin Emefiele has said that the challenges facing Nigeria’s economy are of a global dimension and not peculiar to Nigeria.

Emefiele said this while given his speech at the 55th Annual Bankers Dinner hosted by the Chartered Institute of Bankers of Nigeria (CIBN) 0n Friday, November 27, 2020.

In his opening address, Mr. Emefiele congratulated the CIBN for the annual event, which he was attending for the sixth time since assuming the role of CBN Governor in June 2014.

According to him, each of the dinners provided him ample opportunity to discuss with the key stakeholders in the banking and finance community on critical issues and events shaping the economy, as well as policy measures put in place by the CBN towards revamping and growing the economy.

He enumerated several issues and challenges facing the economy, which were not peculiar to Nigeria but global. Hence, nothing for the country to panic about.

In his words, “We confess that the problem we face today is of a global dimension. The Global Economy is challenged, just like the Nigerian economy. My appeal to our media analysts is that in the course of conducting their analysis of the Nigerian economy, they should realise that their public comments, particularly if they are alarmist, could create panic in our environment.

“We cherish their counsel, but urge that they be more constructive in their pungent criticism as this could hamper our efforts to return our country and economy back to recovery. When you over dramatize a problem, you create panic that slows the process of recovery.”

According to Emefiele, the times have been challenging, as the COVID-19 pandemic completely ravaged the global economy, but it was quite reassuring that a solution would soon emerge, with the reports of developments of appropriate vaccines by several firms to tackle the dreaded disease.

Mr. Emefiele said, “Like other economies, the Nigerian economy was not immune from the COVID-19 shock in 2020. Nigeria’s gross domestic product (GDP) contracted by -3.4 percent in the third quarter, a welcome improvement from the – 6.1 percent recorded in the second quarter. The negative rate of growth was due to a series of external factors in addition to the lockdown measures, imposed in order to curtail the spread of the virus.”

Emefiele challenged the banks to optimally harness the huge value-chain opportunities in several sectors of the economy through their intermediation functions, saying:

“Let me also add that while COVID-19 has brought on several challenges to our economy and indeed the banking sector, it offers a unique opportunity for us to build a more resilient economy that is better able to contain external shocks, whilst supporting growth and wealth creation in key sectors of our economy.

“Proactive steps on the part of stakeholders in the banking and financial system in supporting the growth of sectors such as agriculture, ICT and infrastructure, will strengthen our ability to deal with the challenges that have been brought on by COVID-19, while enabling the growth of our economy in general.”

Bottom line

With a sustained and consistent implementation of the intervention measures, the Nigerian economy is expected to rebound from recession by the first quarter of 2021 (Q1 2021).

However, this depends to a large extent, on the full restoration of economic activities in key sectors, as well as the production of appropriate COVID vaccines that will be made available to millions of people across the world.

The world’s fast-emerging financial juggernaut, Ripple, recently disclosed it is selling roughly 33% of its stake in MoneyGram. It is its first sale of such shares since Ripple invested in the popularly known American remittance firm in 2019.

Data retrieved from Ripple’s filing with the U.S. Securities and Exchange Commission revealed Ripple owns 8.6% of shares outstanding in Moneygram or 6.22 million shares, including a warrant to purchase another 5.95 million shares for a total equity position of 12.2 million shares or 17% of MoneyGram’s shares outstanding.

Ripple disclosed it will be selling around 4 million shares, approximately 33.3% of its entire stake. After such a sale, the fintech company will still own at least 3.22 million shares or 4.44% of MoneyGram.

What you should know

MoneyGram is a fast-growing platform for cross-border P2P payments and money transfers around many countries.

Recall that Nairametrics exclusively broke the news in June, about MoneyGram receiving $20 million in funding from Ripple to enhance its payment solutions through a partnership system with many leading financial institutions.

• The funding by Ripple completes its $50 million offerings for some stake in MoneyGram to run its experimental program for testing the effectiveness of the digital token XRP.
• The deal would definitely give MoneyGram’s arch-rival, Western Union, a run for its money. Reports from different private sources, seen by Nairametrics, shows that Western Union is now bent on buying MoneyGram to scale its robust growth experienced lately.